Success of pay wallsat smaller papers isgood sign for print

Positive numbers at local dailies give hope to bigger playerssuch as New York Times, but recipe has not worked for all

; BY NAT IVES nives@adage.com

IF YOU WANT to know what paid content
on the web can do for newspapers’ paid
circulation, keep your eye on places such
as Lima, Ohio and Bend, Oregon. If pay
walls can’t make it in these environments, they probably can’t make it anywhere else.

The papers that are more likely to
catch your attention, of course, include
Rupert Murdoch’s Times of London,
which starts charging for full access to its
site in June; The New York Times, which
will charge its heaviest online readers
starting next year; and even the
Intelligencer Journal-Lancaster New Era,
a mid-sized paper in Pennsylvania, in the
next few weeks hopes to start charging
out-of-towners who are heavy obituary
readers. “It’s roughly 5% of our page
views,” said Ernest Schreiber, online editor at LancasterOnline. “It seemed like it
was a significant amount of our readership but not so much that if we upset people that it would really damage the site.”
The Wall Street Journal and The
Financial Times have already proved that
readers will pay for standout business
news on the web, but if pay walls around
general-interest news work in London,
New York and Lancaster, Pa., maybe
they’ll work in many other places, too.

But the big questions about bigger
papers’ future on the web already have a
proving ground of sorts at much smaller
outlets that have already given paid content a go. It’s not that pay walls will definitely work in major metro areas if they
work in smaller markets, it’s that they
need to work in smaller markets if they’re
going to work in the majors.

“The newspapers that are going to
have the best advantage instituting the
pay walls are going to be the big national
guys with differentiating editorial like The
Wall Street Journal and some of the smaller guys that offer information that truly is
not available in other media,” said Randy
Novak, director of newspaper strategy at
NSA Media, a unit of the Interpublic
Group of Cos. that specializes in buying
local print media. “The ones that are going
to struggle, I think, are the ones that fall in
between, if they don’t provide something
that can’t be readily accessed elsewhere.”
So what are the odds for pay walls succeeding in, say, Boston or Chicago?

There’s some good news from theArkansas Democrat Gazette, the mostfamous general-interest paper to main-tain a pay wall around its website andone that’s holding up nicely in print—itsaverage weekday circulation increased2.7% to 185,222 over the six monthsthat ended in March, according to itsnew report with the Audit Bureau ofCirculations. That includes 4,242 elec-tronic editions, but paid print alone stillincreased 2.3%. And that’s a large paper,although it’s been charging since 2001,so readers are used to it.

Source and notes: Newspapers’ paid circulation reports to the Audit Bureau of Circulations,

for editions excluding Sundays, covering the six months ending in March 2010 and compared against
the six months ending in March 2009. Total paid circulation includes electronic editions.

$34.95 per year. Back then, the Reflector
had been reporting circulation declines, a
3% drop to 8,866 for the six months ending in March 2008.

It’s true that some of the recent circu-lation growth has come from cheaperonline-only subscriptions, and that printadvertising remains the most lucrativerevenue stream for newspapers, but theReflector’s print base might be smallerstill without the wall. “We absolutelybelieve our print circulation would belower if we were providing full, free accessonline,” said Andrew Prutsok, its publish-er. “I couldn’t say how much.”The wall might not be as effective if ithadn’t made an important change alongthe way. “At first we were putting up ourpolice log online every day for free,” Mr.Prutsok said. “Our online paid was stuckon about 140. When we took the policenews away, the paid online doubled.”The Lima News, another Ohio paper,just reported average Monday-through-Friday paid circulation of 29,981, down3.9% from 31,208.

That’s better than the average forpapers small or large, but publisher JamesShine doesn’t think the pay wall thatwent live last August is playing a big roleone way or another. “My sense is thatpeople who like the printed product preferto get it that way, and those that like toread us online do so because they are outof town or it is more convenient forthem,” Mr. Shine said. “They seem to betwo pretty diverse groups.”The biggest factor lately has been thepaper’s own pricing, according to Mr.Shine, who noted that it raised its news-stand price in March 2009 and increasedhome-delivery prices last June, commontactics nowadays for newspapers lookingto shore up their finances. “Both of thoseactions accelerated our rate of print copy

The Intelligencer
Journal-Lancaster New
Era, a mid-sized
paper in
Pennsylvania, in
the next few
weeks hopes to
start charging
out-of-towners
who are heavy
obituary readers.
“It’s roughly 5%
of our page
views,” said
Ernest Schreiber,
online editor at
Lancaster
Online.

For more news
and information
on the continuing
pay-wall debate,
go to

AdAge.com/mediaworks

GOOD NEWS FROM ARKANSAS: The most famous
general-interest paper to maintain a pay wall
around itssite increased weekdaycirculation
2.7% over the six months ended in March.

decline,” he said.

In the Florida Keys and Key West,
you can read much of the Citizen free on
KeysNews.com, but full access and the
PDF electronic edition have required a
print or online subscription since 2006.
The Crime Report, for example, is not for
free riders in Key West either.

Back in 2006, The Citizen reported
average Monday-through-Saturday paid
circulation of 10,183 for the six months
ending that March. In the new numbers
out last week, it reported Monday-through-Saturday paid circulation of
9,547, down 2.8% from the equivalent
period a year earlier. Those totals included 1,216 electronic-only subscribers, up
52.4% from 798 a year earlier.

It’s a stronger performance thanmany, many newspapers—even smallones—but Publisher Paul Clarin said hewasn’t sure whether the pay strategy isaffecting his paid print circulation. “Wedon’t operate in a vacuum,” he said. “If acustomer wants to buy online, we sell it tothem. About 800 of our subscribers whoare online live between Key West andMarathon, where we offer home deliv-ery. So, it’s the customer’s choice.”And the Bend Bulletin in Oregon justreported a 34% increase in weekday paidcirculation, but largely because this year ittook advantage of Audit Bureau rulesallowing newspapers to count subscriberstwice if they pay extra for content on theweb. The print edition costs $10.50 permonth, print plus the electronic editioncosts $11 per month and the electronicedition alone costs $8 per month.

“The rationale of being able to use
your website to increase your ad revenue
through increased traffic simply has not
proven accurate,” said Keith Foutz, corporate circulation and operations director at
Western Communications, which owns
the Bulletin.

Free content online has instead made
it easier for people to stop buying print,
eroding ad revenue for the print edition in
the process, Mr. Foutz said. “Do we need
to do a better job of adapting and opening